TOKYO, May 7 (Reuters) - JFE Holdings, the parent company of Japan's second biggest steelmaker, on Tuesday posted a 21.4% increase in net profit for the year ended in March to 197.4 billion yen ($1.28 billion) thanks to higher prices, beating analysts' forecasts.

A LSEG poll of analysts expected JFE Holdings to post 194.90 billion yen in net profit.

JFE Holdings said it now forecasts net profit for the year ending in March 2025 at 220 billion yen on higher-value-added products and increase in sale prices.

In particular, the company plans to expand sales of electrical steel sheets for electric vehicles and steel plates for offshore wind power equipment, capitalizing on Japan's ongoing efforts to achieve a carbon-neutral economy by 2050.

In February, JFE Holdings announced an increase in steel product sale prices by 10% on average from April to reflect rising raw material costs and global inflation.

The company expects its non-consolidated steel production this fiscal year at around 23.40 million tonnes, on par with last year, saying that while activity in the auto sector at home is expected to be robust, labour shortages and soaring materials prices are seen continuing pushing back demand.

"Overseas, the supply/demand balance for steel products continues to loosen and prices continue to stagnate owing to an increase in exports, such as from China, where the real estate sector is in a slump," JFE Holdings said.

($1 = 154.5000 yen) (Reporting by Katya Golubkova; Editing by Christian Schmollinger and Lincoln Feast)